What NOT to tell a car dealer - CNN.com (2024)

(AOL-auto's)-- Are you afraid to buy a new car? Afraid that you'll say the wrong thing to a car dealer and give him the upper hand in the price war?

Buying a new car, or even a used car, doesn't have to be as nerve-wracking as it was years ago.

For starters, the advent of the Internet offers car buyers the opportunity to compete with more information than ever before.

It's quite easy to get basic information including MSRP, features, options and reviews on any car you have your eye on before visiting a car dealer, rather than having to rely on the dealer to inform you.

With more car dealers than ever before, consumers now have more influence. It's a common consumer tactic to play two car dealers off of each other, or in car dealer jargon 'cross-shopping', to see which one can get you the best deal.

But it still helps to know what to say and what not to say when you and the car dealer are playing the price haggling game, because you can still say the wrong thing to give the car dealer an edge in the negotiations.

We spoke with a AAA car buying expert and a car dealer to find out what NOT to say once you're on a car dealer lot, and what you should say.

Don't talk about monthly payments

“You should never start talking about monthly payments,” says John Nielson, director of auto repair and purchasing for AAA. “You just have to concentrate on negotiating the purchase price. Once you start talking about monthly payments, everything gets confused because suddenly you don't know whether it's the 24-month or 36-month payment, or how much of that is the interest. costs if you finance the purchase through the dealer."

Nielson's advice on this matter is supported by a representative at a car dealership in Virginia, who agreed to speak to us on condition of anonymity. “I don't want to shoot myself in the foot,” he says. That's why we call him Bill.

“Dealers will definitely try to get you to negotiate monthly payments instead of the purchase price because we make more money that way,” says Bill. "We'll say something like, 'I can get you in this car for $300 a month,' but we won't say how many months it is. If we can get you to commit to a longer payment structure, and that If we do the financing, we make more money from you in interest payments.”

Don't tell a car dealer about your trade-in

In short, says Bill, "dealers love to move money around, so it's probably not in the buyer's best interest to immediately mention that he or she has a car he or she wants to trade in. Because once we know , we know it too." We want to get as much money as possible from the loot."

Bill explains how getting more currency for your transaction can be a smokescreen that ultimately won't save you any money. “We'll assess the value of the car, and if it's worth, say, $15,000, we'll tell you we'll give you that amount,” he says. "But once we do, we'll have a pretty hard time lowering the retail price of the car. So in that case you'll probably pay full MSRP for your new car."

Bill tells us, "With CarMax so popular, consumers might consider not trading in their car at all and just selling it through CarMax. You'll almost always get a better price for it when you sell it than what a dealer would expect ." gives you resale value.”

AAA's Nielson has similar advice on this front, although he looks at it from a slightly different perspective. "It's fine to say you might want to trade in your car because you don't want to get caught telling them something that isn't true. But just say to the seller, 'We'll talk about it later, let's focus.' on the price of the new car for now," says Nielson.

“Every time you add the trade-in value of your existing car into the negotiation of the price of the new car, the numbers start to move back and forth, and you can become confused about how much you're actually paying for the new car. . car,” Nielson warns. “The biggest way consumers can go wrong in this scenario is by losing sight of the vehicle's purchase price, which is the most negotiable amount.”

Nielson laughs: "You probably shouldn't tell them that you recently had a car repossessed or that you have bad credit. That kind of information probably won't work in your favor."

And while it may be unwise to tell a dealer that you desperately want itwas-- information that any salesperson may have no idea about -- there's nothing wrong with telling the car dealer that you definitely want to buy a car in a few days.

“Face it, dealers are trying to make a living,” Nielson says. “So if they think you're just kicking tires and making a purchase in six months, they might think you're wasting their time so you don't get as much attention from them.”

Arrange your own financing to save interest

Back to the financing question: Bill reveals, "A tactic dealers sometimes use is to get the buyer lost in the numbers by asking, 'Where do you want to be? What's your budget?' And when we know that, we start talking about financing through us, a way that we make a lot of money on the back end of the deal.

That's why Nielson advises potential car buyers: "Do your homework, find out what incentives are out there, and use a payment calculator you can find online so you know how much car you can get into for that price."

It's also best to get pre-approved for a car loan before you even step into the Thunderdome — er, the dealer's showroom. Bill says, “That way, if we know in advance that you've been pre-approved to get your financing elsewhere, we won't try to hit you with a big bill.interest. That's what a lot of dealers will try to do without even knowing what your credit score is.”

Paying cash can hinder your chances of getting the best deal

One question to consider is whether you plan to pay in cash. (If only we were all lucky enough to have a coin like that lying around.) If you're going to pay in cash, Bill tells us this is something you might not want to say ahead of time.

“When dealers negotiate the purchase price, they expect to make money on the back end through financing,” Bill explains. “So if you tell them up front that you'll pay cash, the dealer knows there's no way he can make money off you with financing. So he may not be as flexible on the purchase price if he already knows he will doing." not making money off you with financing.”

This likely applies if you have been pre-approved for financing. It's best not to immediately announce that you don't plan to use dealer financing until you've negotiated the price of the car.

It is not necessarily bad form for the buyer to tell the car dealer up front that he is strongly considering financing the car through the dealer, and then later say, "I've changed my mind," after negotiating the purchase price.

“The buyer CAN get a better deal if he does that,” Bill admits, “because in that scenario the dealer can always take something off the purchase price and think he's going to get some interest from you on the financing.”

Finally, Bill confirms, "It's okay to say you've been to other dealers because cross-shopping between two dealers is always a good idea. From the dealer's perspective, customer service is what sets one dealer apart from another dealer who sells the products." The same. “Some customers are willing to pay more money if they are treated well during the purchasing process because that's a pretty good indication that you'll be treated well later when you come back to have your car serviced or repaired.”

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